The German government has recently begun selling millions of dollars worth of Bitcoin (BTC) from a confiscated wallet, further contributing to the lack of catalysts for a price recovery in the cryptocurrency market.
The move comes as increased selling activity and unprecedented selling by long-term BTC whales have led to a sharp price correction, preventing Bitcoin from consolidating above $70,000 and retesting its previous all-time high.
Whales And German Government Fuel Market Volatility
According to blockchain analysis platform Arkham, the German government has initiated the process of selling Bitcoin on cryptocurrency exchanges. During Thursday’s morning trading session, $65 million worth of BTC was sent to two likely exchange deposits, including Coinbase.
NewsBTC reported on Wednesday that the German Government moved $600 million worth of BTC, with $130 million sent to four likely exchange deposits, including Kraken and Bitstamp. Arkham’s records indicate that the German Government still holds $3.05 billion worth of BTC.
In late January, the German police seized the country’s largest cryptocurrency, confiscating 50,000 Bitcoin worth $2.17 billion. The seizure occurred after the suspects voluntarily transferred the BTC to official wallets provided by the Federal Criminal Police Office (BKA).
Moreover, recent on-chain data reveals that long-term BTC whales have sold a substantial $1.2 billion worth of Bitcoin over the past two weeks, further exacerbating the market downturn.
Bitcoin Price Analysis
In a recent social media post, technical analyst Mags, provided an insightful analysis of Bitcoin’s current price action, suggesting a potential mid-range breakdown. Mags highlights two possible scenarios for the market’s future direction:
- Scenario 1: Reclaim the mid-range: According to Mags, the recent pump on Thursday, which temporarily pushed the price above $66,000, has been completely retraced as BTC trades at $64,860, indicating a bearish retest on the daily chart.
- Scenario 2: Retesting the range low: Mags highlight an important support level near the range low of $60,500. This level holds significance in determining the potential future trajectory of BTC’s price.
Bitcoin reclaims the mid-range level in this scenario, leading to a potential run back towards the range high. According to Mags’ analysis, if this scenario plays out, it may result in a breakout above the previous range high, suggesting a bullish trend continuation.
Alternatively, BTC may retest the range low before moving higher. If this scenario unfolds, it could lead to a prolonged period of sideways movement, potentially prolonging the consolidation phase.
However, even in this scenario, Mags maintains a bullish outlook as the overall higher time frame structure remains positive.
Featured image from Shutterstock, chart from TradingView.com